How to Prepare for Losing your Job

Often, we do not get a lot of notice if we are about to lose our job, unless we are on a fixed term contract or heading towards retirement. This is why it can be wise to prepare for it anyway. Being prepared for the worst can give us a sense of security as we will know that should we be made redundant or get dismissed from our job, we will be financially prepared for this. There are different things that we can do which should help.

Pay off Debts

If you have lots of outstanding debts, then finding the money to repay these can be a big burden when you are out of work. This means, that if you can pay them off, then you will have far less stress. It is therefore worth taking a look at what debts you have so that you can start to organise this. Make sure that you are paying the minimum amount off each of them and then look to see which is the most expensive. Check whether you can repay this early, as some lenders will not allow it or will charge highly for it and then start paying a bit extra off it. You might be able to afford to increase your repayments so that you can repay a bit quicker or pay in lump sums when you have them. It is a good idea to try hard to do this as it will save you a great deal of money in interest which could lead to a better financial future for you.

Build up Savings

Once you have repaid the debts that you can, then it can be a good idea to get some savings behind you. It is wise to put some money regularly into a savings account. If you were paying loan repayments that you no longer need to pay because the loans are repaid, then you will have that money, that you used to pay for that, which you could put into a savings account. Of course, once you have extra money like this, it can be fund to treat yourself to a few extra things, but if you can save a majority of it, then you will have that money available to fall back on should you need it. If you did not have loans then you may not have any money to spare that you can use to be able to save. If this is the case, then you may need to think of some ways that you can perhaps earn a bit more or spend less, that will free up some money that you will be able to save. Also, make sure that you put your savings into an account where you can get a good return on your money as that will allow you to build up your savings a little bit more.

Consider Insurance

IT can be worth considering getting some insurance that will pay out if you lose your job. If you have a mortgage, for example, there will be some insurances that will cover your premiums if you lose your job. However, be very careful when you are looking at insurance as you could find that they will not pay out in all circumstances. So, check carefully before taking one out, whether they will pay out of you lose your job. Also find out what the premium will be and decide whether you feel that the insurance will give you good value for money. You may feel it is a bit expensive and you would rather use that money that you would be spending on a premium, to put into your savings account so that you can spend it if you need to.

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